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Australian economic growth flat in 2015

Australian economic growth flat in 2015

Reporter
— 1 minute read

Weakness in the Australian economy remains evident, capped off by a 0.9 per cent contraction in net national disposable income for the quarter, says Fiducian.

Fiducian Investment Management Services investment manager Conrad Burge said Australian economic growth has slowed dramatically and is only up a “statistically insignificant” 0.2 per cent for the June quarter.

Mr Burge noted that the Australian share market has also been flat from 1 January 2015 to 27 November 2015.

Moreover, the global economy slowed this year with the International Monetary Fund (IMF) anticipating growth of 3.1 per cent, down from the predicted 3.4 per cent.

“The coming year though could be better, with global growth forecast to rise to 3.6 per cent,” Mr Burge said.

Overall, from 1 January to 27 November 2015 the US market was up 2.0 per cent and the German, Japanese and Chinese markets were also up 15 per cent, 14 per cent and 6.0 per cent respectively.

Despite global growth set to improve, Mr Burge said the IMF continues to advise advanced economies to maintain monetary accommodation and fiscal reform where required.

“This latter piece of advice is aimed at Germany and China, both of which have scope to lift spending on infrastructure and other fiscally expansionary programs, noting that ‘in particular, the case for infrastructure investment seems compelling, at a time of very low long-term real interest rates’.”

Mr Burge said the slowdown in developing economies is also a concern. He said the IMF marks several factors, including lower commodity prices and tighter external fiscal conditions, rebalancing in China and geopolitical factors as the foremost reasons for the downturn.

“This has also affected Europe, with Mario Draghi, president of the European Central Bank, noting that European growth has been held back ‘in particular by the slowdown in emerging market economies, which is weighing on global growth and foreign demand for euro area exports’,” he said.

 

Australian economic growth flat in 2015
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